Month: October 2018

The second-largest bank in the U.S., Bank of America (BofA), has obtained another crypto-related patent on the development of a secure cryptography key storage system, according to a document published by the U.S. Patent and Trademarks Office (USPTO).

The patent describes a system of securely storing private keys when dealing with cryptocurrency-related transactions with a special mention for institutional organizations. In short, the device offers a system of data security for blockchain networks by implementing encryption and linking data units to the blocks of a certain blockchain.

The bank envisions a future in which digital assets are widely adopted by the general public but that consumers still entrust their assets to custodians such as banks rather than maintaining their own private keys.

“Enterprises may handle a large number of financial transactions on a daily basis. As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to securely store cryptocurrency.”

Along with corporate giants such as Walmart and IBM, Bank of America has been among the United States’ most prolific investors in blockchain research. The firm has applied for dozens of blockchain patents over the years, including quite a few that involve cryptocurrency in some capacity.

Besides its online vault storage system, the bank also applied for a patent for a cold storage system, as well as systems which would facilitate cryptocurrency payments and real-time conversion.

While Bank of America is one of the leading companies promoting innovation in the blockchain sphere, the bank is still skeptical towards cryptocurrencies. In May, Bank of America reiterated its restrained stance toward crypto, calling it “troubling” and confirming its decision to ban clients from buying crypto with their credit cards.

Furthermore Catherine Bessant, CTO at the bank stated their reservations in this regard, but willing to stay in line with the most recent developments:

“While we’ve not found large-scale opportunities, we want to be ahead of it, we want to be prepared.”

Earlier this year, the bank had told U.S. regulators that it may be “unable” to compete with the growing use of cryptocurrency, claiming that failing to adapt “services and products to evolving industry standards and consumer preferences” can negatively affect its activity.

Social trading platform eToro has decided to collaborate with Binance to list the Binance Coin (BNB) cryptocurrency on its platform. As such, the social trading platform also becomes the first platform to offer the BNB tokens to investors for trading via fiat.

eToro is regulated in Cyprus by the Securities and Exchange Commission (CySEC) and in the UK by the Financial Conduct Authority (FCA). The social trading platform enables users to invest in the assets they want, varying from stocks to cryptocurrency and commodities. More than ten million users have shared their investment strategies on eToro’s platform.

Through the addition of BNB on the trading platform increases the number of crypto assets available to eToro’s investors to 13.

BNB is the native token of Binance and it was issued following Binance’s initial coin offering (ICO) in 2017 and it is often used on the Binance cryptocurrency platform to pay for trading fees, exchange fees, listing fees, and partner applications.

Respectively, BNB holders can also use the token to invest in certain ICOs listed on Binance’s Launchpad program. Regarding partner applications, for instance BNB token investors can book flights in selected airports such as the Brisbane Airport and pay for virtual gifts using their tokens on Uplive, an Asian live streaming mobile app with over 20 million users.

In an interview Guy Hirsch, a managing director at eToro, has said the company was excited to partner with Binance:

“eToro adds coins that we believe have a great product behind them with a clear product roadmap and clear business usage. The Binance team has been steadily building innovative infrastructure for the new world and as such, we believe there is great demand for it in the market.’’

On the other side, the founder and CEO of Binance, Changpeng Zhao, has stated his company was honored to have its token listed on eToro, citing that “with this addition, the Binance coin can reach millions of more people, many of whom are more accustomed to the traditional financial industry. As a utility token, we believe in creating long-term utility and value. We will continue to do so together with eToro.”

BNB will also be added to eToro’s CryptoPortfolio, which enables investors to diversify across all available cryptocurrencies, weighted by market cap, with just one click. The platform then added that like all other crypto assets, investors choosing BNB on eToro own the real underlying asset, with the investment platform acting as custodian.

Yoni Assia, co-founder and CEO of eToro has also declared the platform would continue to add leading crypto assets with meaningful uses cases to its platform, citing that “as a regulated securities broker, we have the ability to offer both utility and security tokens on our platform. We support the movement of assets onto the blockchain and the tokenization of securities.”

Most recently, a small Canada-based cryptocurrency exchange MapleChange has pulled off an exit scam, disappearing with user funds.

On October 29th, the Canadian cryptocurrency exchange claimed on its social media account that a catastrophic hack had cleaned out “all its funds”, though its team later said only its Bitcoin (BTC) and Litecoin (LTC) wallets had been cleaned out as a result of a “bug”.

“Due to a bug, some people have managed to withdraw all the funds from our exchange. We are in the process of a thorough investigation for this. We are extremely sorry that it has to come to end like this. Until the investigation is over, we cannot refund anything.”

Respectively, the exchange did not mention the involvement of law enforcement or any details about the supposed hack. Due to the suspicious nature of the incident, users demanded more information and almost immediately after the “hack,” the exchange deleted its website, Twitter account, and other social media accounts along with the identity of its executives and chief executive officer.

“We have sustained a hack, and we are investigating the issue. Because we have no more funds to pay anyone back, the exchange has to close down unfortunately. This includes all of our social media,” says their social media account on Twitter.

As seen in previous security breaches of major exchanges like Bithumb in South Korea and Coincheck in Japan, in the event of a hack, there is a cohesive cooperation between the exchange platforms and the local financial authorities and government-backed intelligence agencies, which help investigate the hack and eventually recover the lost funds.

As such, this incident has led experts within the crypto community to encourage crypto investors to avoid using minor exchanges with no reputation and look for cold wallets that safely represent their holdings. The CEO of Binance Changpeng Zhao, the world’s largest crypto exchange, suggested ranking the exchanges by their amount held in cold wallets, as it is not possible for exchanges to fake holdings in cold wallets.

Generally, small cryptocurrency platforms focus on maximizing profitability over security and investor protection. As such, it is strongly advised that crypto investors rely on established, secure, transparent, and regulated crypto exchanges that have the capability and capacity of protecting user funds and compensating investors in the event of a security breach.

Cryptocurrency-mining startup Bitfury is weighing strategic options for raising funds, which includes an initial public offering (IPO) in what could be Europe’s first major listing in the industry, according to people familiar with the matter. Reported by Bloomberg on Thursday, Bitfury is allegedly looking into listing in Amsterdam, London or Hong Kong, possibly as soon as 2019, however no final decisions have been made yet.

Accordingly, people familiar with the matter claimed that Bitfury is examining a range of options, which include raising debt financing as well as selling a minority stake. Should Bitfury go public within the next two years, its valuation could reach from $3 billion to $5 billion. However, the report also pointed out these valuations are “early estimates and could change depending on markets and the industry.”

The startup was founded in 2011 and it is known as the largest non-Chinese company that develops Bitcoin(BTC) mining hardware and provides infrastructure for BTC mining. The company also developed a more efficient algorithm for routing on the Lightning network called Flare, which operates as a secure off-chain channel for faster transactions with less commissions.

Most recently, Bitfury released its latest generation of Bitcoin application-specific integrated circuits (ASICs) for mining the world’s largest cryptocurrency by market cap last month, as well as an enterprise-grade Bitcoin miner earlier in October. It has also been working to build up a number of mining farms in Canada through its affiliate Hut 8 Mining Corp.

The company has apparently come into contact with several global investment banks around the world as it considers its strategic options for an IPO. Should the cryptocurrency mining startup launch an IPO, it would join fellow miner manufacturer Bitmain, which had announced just last month its own IPO on the Hong Kong Stock Exchange.

As of press time, Bitfury has not yet commented or given an official statement regarding this.

Announced on Wednesday in a notice, Japan’s finance regulator the Financial Services Agency (FSA) has officially approved a cryptocurrency exchange association as a self-regulatory industry body. The FSA declared that it has certified the Japanese Virtual Currency Exchange Association (JVCEA) as a “fund settlement business association.”

The FSA approval gives the industry association rights to set rules to safeguard customer assets, prevent money laundering, and give operational guidelines. The association will also have to police compliance.

“It’s a very fast moving industry. It’s better for experts to make rules in a timely manner than bureaucrats do,” a senior FSA official said in a briefing, having declined to be named.

The association has been established by 16 licensed crypto trading platforms in Japan, as a result of a $530 million hack on the Coincheck exchange earlier this year, and has filed an application for approval with the FSA in August.

Recently, the Zaif crypto exchange, one of the 16 licensed platforms, was hacked for $60 million and subsequently had to sign itself over to another firm last month because it did not have enough reserves to refund users for their losses.

According to a recent report from Reuters claimed the association may require member exchanges to hold separate bank deposits and government bonds. The move would be aimed to ensure exchanges have sufficient funds to compensate users in the event of a hack.

The JVCEA has previously made other proposals, such as imposing regular audits on crypto exchanges and limiting the amount of borrowing available to margin traders. Certainly, the JVCEA policy is going to comprise of stricter rules as some FSA officials agreed that the crypto industry needs a heavier regulatory approach, whilst not wanting to stifle its growth.

Following this, the FSA has seen an increasing number of companies expressing interest in applying for a cryptocurrency exchange license. As the approval process has become stricter, those interested are to submit the newly updated documents required for the approval. As such, exchanges must now complete an 83-page Q&A form that includes details such as a platform’s crypto reserves, offered trading pairs and their maximum leverage ratio in margin trading.

According to the FSA document, the review process will also focus on security measures taken by exchanges. For instance, whether their platform is developed in-house or whether they use third-party agencies to manage customer outreach and marketing efforts. The FSA has mentioned as well that after reviewing written submissions, it will also conduct on-site inspections.

In September, the agency has expressed their intent to increase staffing levels next year for its cryptocurrency exchange license scheme, citing that over 160 firms were looking to submit applications at the time.